Economics of football: Boulder businesses cheer for winning CU season

When the Buffs keep losing, some local industries take a hit

By Brittany Anas Camera Staff Writer

Posted:
08/24/2013 02:00:00 PM MDT

Updated:
08/25/2013 09:14:14 PM MDT

David Tobin, left, asks his father, Bill, and sister, Grace, about the look of a University of Colorado T-shirt at the UMC Book Store on Thursday. Local businseses say the success or lack thereof of CU s football team can make a big difference at the cash register. (Cliff Grassmick / Daily Camera)

Framed newspaper front pages reflecting the Buffs' glory days and winning seasons hang above the cash register at the T-Galaxy shirt shop on University Hill.

It sure is symbolic.

When the University of Colorado's football team is winning, those cash registers are chirping. When the Buffs are doing poorly -- during last year's 1-11 season, for example -- there's hardly anybody shopping for fan apparel.

"We know people will spend money if the team wins," said Mike Stallman, general manager and part owner of T-Galaxy, 1121 13th St. "Sales are almost directly connected to wins."

So just what is the economic benefit of a good football team?

It depends who you ask in this college town -- but many agree that a winning team can give a boost to local shops and restaurants, draw tourism to Boulder and, one national study suggests, lead to an increase in donations and college applications. An economics professor who has studied the impact of sports teams on local economies, though, says college football doesn't have much of an impact on a metropolitan area.

But for shops like T-Galaxy, much depends on winning records.

For example, when the Buffs are faring well, Stallman said he hires about 30 part-time student employees. This year, though, he's got five on his payroll. Sales last year were 25 percent of what they are in an average year .

When it comes to inventory, Stallman needs to be nimble. Should the Buffs be 4-0 by the end of September, for example, Stallman will need to up his T-shirt orders -- and hope licensed vendors can deliver before the season is over.

Time of transition

The Buffs enter the 2013 football season with a change in regime.

Head football Coach Mike MacIntyre replaces Jon Embree, who was fired in November after the notorious 1-11 season and going 4-21 in his two years on the job.

CU forced Athletic Director Mike Bohn to resign in late May, replacing him with former Texas Rangers executive Rick George, who, with a $700,000-a-year base contract, is the highest paid administrator ever at the university.

"The hiring of an athletic director is the most important economic decision in our city," said Mark Heinritz, co-owner of The Sink on University Hill. He and his brother also recently co-founded West Flanders Brewing Company on Pearl Street.

When the Buffs are winning, fans are enthusiastic and spend money celebrating after home games.

"With a losing team, they leave the game early to go home -- if they even show up at all," Heinritz said.

The last time the Buffs had a winning season was 2005 under Gary Barnett's helm -- the team went 7-6 that year. In 2004, the Buffs were 8-5. CU's football team won the Big 12 Championship in 2001, beating Texas 39-37.

Heinritz suspects that just one winning season is all it will take to re-energize the fan base.

George, who is settling in as CU's new athletic director, said he knows some fans are frustrated with the football team. In his new role, he expects the team to improve, the game-day experience to get better -- and he'll be visiting with fans tailgating before games, as well as inviting donors, alumni and former athletes to join him in his box at every game. He also vows to find ways for the Athletic Department to partner with local businesses.

"I think we're going to have a very good season," George said during an interview last week. "Will it meet everyone's expectations? Probably not. But we're going to get better every year."

George's contract holds several bonus potentials, including $50,000 each year if the average attendance at Folsom Field for regular-season football games is at least 50,000. Last year, average attendance was 45,373.

Eventually, George said, he's hoping to regularly sell out Folsom, a stadium that seats 53,613.

Roaming Buffs

Football also is good for tourism, said Mary Ann Mahoney, executive director of the Boulder Convention and Visitors Bureau.

The average daily expenditure of an overnight guest in Boulder is $288 -- a figure includes fans who have traveled here for football games, according to Mahoney. That includes money spent on lodging, dining out and at retail shops.

CU's entry into the Pac-12 also helps tourism, Mahoney noted, as alumni who are now living in Pac-12 territory, such as California, are coming out to watch games. And fans from the Pac-12 travel well, coming to Boulder from California, Oregon, Washington and Arizona to cheer their teams.

When the Buffs are playing well, not only do the season ticket holders show up, but so do the more casual fans from around the state, Mahoney said.

"When they are winning, people want to meet up with their friends and go out for a meal afterwards and re-live what a great day it was -- instead of packing up their tailgate and going home," she said.

There are no specific studies that measure the economic impact that CU's Athletic Department has on the local economy.

"Fundamentally, though, when you're supporting the Buffs and the University of Colorado, you're supporting the Boulder economy," said John Tayer, president and CEO of the Boulder Chamber. "It gives us the opportunity to showcase what a wonderful community we have here."

Much more generally, though, CU's four-campus system pumped roughly $5.3 billion into the state's economy in 2011, according to an analysis released by the school last year.

William Beyers, a professor emeritus of geography at the University of Washington who still teaches, has conducted economic impact studies on everything from high-tech industries to the arts and sports teams.

A football team is hardly a "make or break" for economies of metropolitan cities, he said. However, more rural areas with football teams tend to be more dependent on the tourism dollars generated by those teams.

Football, he said, has obvious impacts on businesses that depend on fans' spending -- industries that include hotels, restaurants and bars, entertainment and travel.

"The bottom line is even though the economic impact of football may be small, it's greater than zero and it's part of a diverse portfolio," Beyers said.

Measuring financial impact of wins

A 2012 study from the University of California at Berkeley found that colleges with winning football teams reaped several benefits that ranged from a jump in donations to an increase in the number of applications from in-state students.

The study, titled "The Benefits of College Athletic Success" by Michael Anderson, revealed that a school that improves its season wins by five games could expect alumni athletic donations to increase by $682,000 and applications to increase by 5 percent. In-state enrollment could increase by 3 percent, the acceptance rate might drop by 1.5 percentage points and the incoming 25th percentile SAT scores increase by 9 points.

A separate 2009 report found that a $1 million increase in football team expenditures is associated with 6.7 percent increase in football winning percentage -- or 0.8 games.

Ryan Chreist, CU's assistant vice chancellor for alumni relations, said there's no doubt that graduates want to cheer on their school, especially when their teams are winning. But he points out that there are 250,000-plus alumni -- and not all of them are paying attention to athletics.

While the CU Alumni Association connects with both in-state and out-of-state fans with pre-game events, there are other popular, non-sports events organized throughout the country where graduates live. Chreist points to a networking event for alumni in cities where the Broadway musical "The Book of Mormon" is touring. Matt Stone and Trey Parker, the creators of the Tony Award-winning production, met at CU when they were film students in the early 1990s.

CU Admissions Director Kevin MacLennan said nationally televised games have the potential to showcase the Boulder campus to possible out-of-state students. But, he said, there's a number of factors that go into students' decisions about where they'll attend college.

"The question that we get a lot in admissions is not so much about the records of the team as it is about whether there's a lot of school spirit and are the students and the community members behind the Athletic Department. We're able to say 'Yes' to that.'

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